A tax cut for Chevron?

Tax cuts for Chevron's new tower aren't special treatment, and that's the problem.

Copyright 2013: Houston Chronicle

Published 6:06 pm, Thursday, July 11, 2013

Why is Houston planning to give Chevron's new office tower a $2.7 million tax abatement? The technical answer is that we don't have much choice. Chevron applied for and received a $12 million grant from the Texas Enterprise Fund to build its new tower in downtown Houston, but that money is contingent upon receiving a local incentive. Chevron can't get money from Austin unless Houston gives something, too. So we're dragged along, whether there is any evidence that this tax cut is a good idea.

As noted by Chronicle reporter Nancy Sarnoff, Chevron says the company sought no special treatment on the project ("Chevron building an 'urban campus,'" Page A1, July 4). That's exactly the problem: Tax breaks that should be seen as special treatment have become the norm. States and cities are in a race to the bottom to provide financial incentives without any thorough cost-benefit analysis or proof that companies are actually swayed by the generous gifts.

Houston is already a business-friendly market and serves as a central nexus for energy companies - Chevron shouldn't need much incentive to build here. On the other hand, Houston lacks the zoning and regulations that other cities use to maintain design and shape neighborhoods. That's where Chevron could use a bit of a push. Because the state grant requires a local incentive, Houston essentially has a veto over the $12 million that Chevron is expecting from Austin. City Hall should use that power to ensure that the new tower contributes to Mayor Annise Parker's stated vision for a more dynamic downtown. This means shaded and covered sidewalks, some street-level retail and a B-Cycle station.

The real challenge would be a lobby design that mimics Reliant Energy Plaza at Main Street Square, where pedestrians can peer down into a revealed tunnel system. The tunnels are often out of sight, out of mind - hidden except for those who already know they're there. Opening the tunnels to the street will bridge that gap and provide folks with knowledge of and access to an underground world of restaurants and tchotchke stores. Houston has to show that downtown isn't dead if we ever want it to be something more than a destination for nine-to-five commuters.

Chevron has been one of our city's great corporate citizens, and its new downtown campus is projected to create 1,700 jobs. But whether it is Costco along the Grand Parkway or a downtown skyscraper, cities, states and companies need to get away from the mindset that tax incentives are a regular part of business.

These breaks should actually provide incentves for corporate action that wouldn't happen otherwise. For Houston, that doesn't mean oil and gas jobs, it means infrastructure investment and urban design.